Massive Drop in Bankruptcy Filings in Brantford in 2013

by J. Douglas Hoyes on March 22, 2014

The Office of the Superintendent of Bankruptcy has released the bankruptcy statistics for 2013, and we can now report that the bankruptcy rate in the City of Brantford dropped by a massive 23.4% in 2013.  Here’s the breakdown:

In 2013 there were 206 residents of the city of Brantford that filed personal bankruptcy, a drop of 23.4% from the 269 who filed in 2012.

In addition, in 2013 there were 228 Brantford residents that filed a consumer proposal, a drop of 4.6% from the 239 who filed in 2012.  Combining both personal bankruptcy and consumer proposal filings, the consumer insolvency rate in Brantford dropped by 14.6% in 2013.

Why did bankruptcy numbers drop so dramatically in Brantford?

An obvious explanation is that the unemployment rate dropped significantly throughout the year.

BrantfordUnemployment2013

The unemployment rate peaked around 7.7% at the start of the year, and declined all the way to 4.1% in November, before increasing slightly at the end of the year.  You can get the unemployment data from Statistics Canada, or from this excellent summary prepared by BrantJobs.ca (here’s the link to the chart); click on the chart to enlarge.

It’s not surprising that with a big drop in the unemployment rate, the number of people needing to go bankrupt would also decrease.

Note that the unemployment rate has increased significantly in the last few months, and by February was back up to 7.1%, so it’s likely we will see a spike in Brantford bankruptcy filings in the months ahead.

How does Brantford compare to other areas?

While Brantford’s overall personal insolvency rate dropped by 14.6%, in nearby Cambridge the rate increased by 6.4%, and Hamilton dropped by 10.2%, so Brantford faired much better than our friends to the north and east.

For all of Ontario in 2013 consumer bankruptcies decreased by 6.3%, and consumer proposals dropped by 7.4% (according to the Office of the Superintendent of Bankruptcy), for a combined decrease of 6.9%, so compared to the entire province Brantford is leading the way.

What will we see in 2014?

That’s a difficult question to answer.  If unemployment remains moderate, and if interest rates remain low, it’s likely that the bankruptcy rate will remain at or near current levels.  Any big increase in either unemployment or interest rate could cause a big increase in the bankruptcy rate.

We don’t know the future, but to protect yourself keep your debt as low as possible so that you don’t risk becoming a bankruptcy statistic.

 

About

Douglas Hoyes, BA, CA, is a licensed bankruptcy trustee and the co-founder of Hoyes, Michalos & Associates Inc., Brantford's largest independent personal insolvency firm.

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